What are the statutes of limitations on debt?

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Statutes of limitations is a statute prescribing a period of limitation for the bringing of certain kinds of legal action. When you are dealing with your Credit Report, it is good to understand and know the statutes of limitations surrounding debt collection. Creditors can use these rules to collect the debt you owe by filing a lawsuit within the statutes of limitations. If their lawsuit is successful, whether by trial or by default, they will receive a judgment. A judgement is a decision by the court that determines what a person is ordered to pay the creditor regarding the debt that was brought before the court. If the creditor receives a judgment, they have the legal right to go after your assets (bank account, property, etc) and even garnish your wages.
Most of the statutes of limitations are around 3 to 6 years but vary state to state. In Mississippi, creditor has 3 years to sue on an oral or written contract, a promissory note, or an open-ended account. If the debt is paid there is no need to worry about these statutes and other possibly applicable statutes. But, if you have not paid a debt that is appearing on your credit report, its important to know if the time for the statute of limitations has passed or if you are still vulnerable to a lawsuit. It may be good to wait until the time has passed to begin to question the creditor. Paying an old debt that you may or may not truly owe is up to you; however, paying it will not stop it from showing on your credit score as a negative mark. There are different statutes of limitations that govern how long information can be reported on your credit report. Making a payment may start the timeline over again for the amount of time it will remain on your credit report, and/or may start the timeline over again regarding the statutes of limitations. A better option may be to dispute the debt with the creditor if you do not believe you owe this debt or that the balance has been paid but is not showing as such, etc.
There are too many laws and subsequent plans of action to discuss them all in a few paragraphs. The rules establishing when the time frame begins on the 3 year statutes of limitations, filing and response to lawsuits, reporting credit information, disputing credit reports, etc; so it’s important for you to speak to an experienced bankruptcy attorney. That doesn’t mean that bankruptcy is the answer or that you are seeking to file bankruptcy. An experienced bankruptcy attorney is versed in the laws that govern debt – both what creditors can do and more importantly, the rights of you, the debtor and what you can do!

Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.

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